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CURRENCY : Dollar Rises on Rumors That G-7 May Meet Soon

December 19, 1987|Associated Press

NEW YORK — The dollar rebounded Friday from its recent slump, rising against most major currencies in domestic trading on speculation that an international meeting could be convened soon on stabilizing the currency.

Earlier in Europe, the dollar fell to a new low against the West German mark but rose against most other major currencies.

Gold prices were mixed, falling in New York after rising in Europe. Republic National Bank in New York quoted a late bid of $479.75 an ounce, down $5.50.

Terri Reid, an investment officer at Harris Trust & Savings Bank in Chicago, said traders who had sold borrowed dollars in anticipation that the dollar would fall further decided to buy back the currency and close their positions Friday because of the chance that Congress would pass deficit-reduction legislation over the weekend.

Passing the legislation, she said "would be a signal that you would see a G-7 meeting called soon" to discuss action to stabilize the dollar. The Group of Seven includes the United States, Japan, Britain, France, West Germany, Canada and Italy.

The dollar fell to 126.45 yen in Tokyo, traded in London at 126.85 yen and rose to 127.055 yen in New York, up from 125.90.

Traders in Europe said the West German central bank failed to intervene in the market as the dollar dropped to a 40-year low of 1.6218 marks at the Friday rate fixing. Later in New York, the dollar rose to 1.63435 marks from 1.6175 marks late Thursday.

Late dollar rates in New York, compared to late rates Thursday, included: 1.32075 Swiss francs, up from 1.31225; 5.5305 French francs, up from 5.4735; 1,201.50 Italian lire, up from 1,190.25, and 1.30725 Canadian dollars, up from 1.3055.

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